Zurich Insurance Group has posted a 12% increase in business operating profit for 2022, including a 14% increase in operating profits for its property and casualty (P&C) segment on a combined ratio of 94.3%.
Overall operating profit came to $6.5 billion, compared with $5.7 billion for 2021, while P&C profits amounted to $3.6 million.
Net income, however, decreased 12% to $4.6 billion owing to a lower level of capital gains, net losses on divestment of businesses and hyperinflation charges related to Zurich’s Latin American business.
In P&C, Zurich’s result benefited from a record level of premiums and lower catastrophe and weather-related claims, partially offset by the inflationary environment experienced within the retail and SME business in H2, particularly for motor.
Gross written premiums grew 14% on a like-for-like basis, adjusting for currency movements, with growth in both retail and commercial insurance across all regions.
The group achieved price increases of about 6% in the year, supported by a commercial insurance rate change of 8%.
For life business, Zurich also reported strong operating performance, with operating profits of $1,963 million, while continuing to reduce the capital intensity of the business
Looking ahead, Zurich says it remains committed to the delivery of its targets for the 2023-2025 cycle.
For 2023 specifically, the company expects P&C commercial insurance margins to expand while rate continues to moderate throughout the year. Retail and SME P&C is expected to start to see improving results as the impact of price increases takes effect and claims inflation moderates.
“We have exceeded our financial targets for the second consecutive three-year period. These were tough years with unexpected challenges during which we had to stay very agile and focused on our goals,” said Zurich CEO Mario Greco.
“The P&C business reports today an excellent combined ratio and more importantly shows double digit top-line growth. Higher risk-adjusted prices in commercial insurance and continued measured progress towards our growth ambitions took P&C gross written premiums to a record level,” he continued.
“The Life business achieved the highest profits ever, with a very light capital consumption. Our balance sheet remains excellent, especially as we progress with the sale of Life back books in Europe.”
“The combination of continued margin improvement in our commercial business, improving trends in retail and our ability to grow across all our businesses supports the Group’s higher financial ambition for the 2023-2025 cycle.”
